4 Financial Myths Surrounding Condominiums
Tuesday Nov 20th, 2018
Increasingly, a large number of home-owners are opting for Condos as opposed to more traditional single-family homes for a number of reasons. If you don’t have a mountainous budget, condo living can offer you a more pocket-friendly entry into the house market. Not to mention, the concept of condo living is running high with the Baby Boomers who prefer downsizing to a more low-maintenance abode. However, even though investing in a City Place Condo is a prudent decision, a lot of misconceptions and myths surrounding them deter potential buyers from reaching a conclusion. Fret not, for we are here to put some of the most common financial Condo fallacies to rest.
1. A Condo is the Closest Thing to Home Ownership
This is a hard nut to crack. While technically you do become a homeowner as soon as you buy a unit in a condominium, you gain access to the rights that are inherent to purchasing a freestanding property. However, condo owners are denied a few rights because condos involve shared ownership. So, while you can do anything to your unit that catches your whim, you can’t go wild with renovations as you can in your own house. You might not be permitted to make electrical or plumbing changes by yourself without the explicit consent of the City Place Condo association and not without the help of a qualified professional, since if your new wiring catches fire or your toilet leaks, it becomes everyone’s problem as well. Not to mention, portions of your unit that are known as “common property”, such as balconies, patios, and windows are not under your control. Communal ownership also translates into the fact that you are entailed to pay condo fees, which goes into maintenance and administrative works.
2. Condo Fees Are a Rip Off
Condo fees is often looked down as an added burden, something traditional home owners are relieved of. However, before snubbing it away as a nuisance, it is important to look into what this fee covers. Generally, condo fee includes a contribution towards the establishment’s maintenance and upkeep, but sometime extends to cover electricity and cable TV, garbage collection, sewer, water, and heat costs. Now imagine, if you had to pay for all these utilities separately as a home owner! Not to mention, in the condo life, you are alleviated of the responsibility of shoveling snow, decluttering the pool, or mowing the lawn yourself; tasks that you would have had to hire professionals for. The key is to look at the bigger picture. While exorbitant condo fees can be a sign of poor money management, you need to diligently review the condo documents for more proof. Condominium’s board of directors who determine these fees are home owners just like you and have to chip in as much as you do, so no one is really profiteering off these charges.
3. Special Assessments Are A Nuisance
Even the best of condo establishments can undergo a situation we call a “special assessment”. Condo owners are entailed to pay up this additional fee when then the customary condominium fee proves insufficient of covering a major unexpected repair. A lot of condo owners are under the impression that their maintenance fee takes care of all unforeseen circumstances but remember that you are as much a part of the establishment as everybody else and are ultimately responsible for its upkeep. Even if you lived in your own single-family home, a major unforeseen expense, such as a roof leak after a storm, could have you turning out your pockets, even if you had routinely saved money for repairs. This one-time fee takes care of the issue at hand without raising the condo fee or wreaking havoc on the overall value of each unit in the property.
4. Condo Fees Should Remain A Constant
Unfortunately like most expenses, condo fees are bound to rise periodically, as inflation soars up the costs of running the establishment. City Place Condo fees are based on the predicted costs likely to be encountered over the year, as well as additional amounts for repair and maintenance reserves. The important thing to keep in mind is that no one is profiteering off your fee and if you try to wriggle your way out of having to address a necessary payment, it is going to cost you in the long run. Whether you sell out to get rid of paying your shares or the board overlooks necessary repairs and maintenance works to keep the cost down. Savvy buyers know better than to accept a dilapidated building or one with a condo fees touching the skies, even if it was for a lucrative discount. They know that this discount is smaller than what they would have to pay for repairs later down the road.
The Bottom Line
Most misconceptions around condominiums stem from a lack of knowledge about what owners are ultimately responsible for or how the condominium ownership works. While, granted, a condominium could be poorly managed, leading to soaring monthly costs, keep in mind that your condominium is looking for anything but to extract a "pound of flesh" from owners. Just because single-dwelling home owners are more in control of their expenditures, it makes expenses easier to swallow, which often misleads them into thinking that condo living is costly. When looking up City Place Condos, be sure to make an informed decision, putting these myths behind you